Jackson task force mired down in finer points of merging two tourism entities into one

A task force charged with creating guidelines for a joint Jackson County Tourism Development Authority is still struggling to figure out exactly how everything will work — and the deadline for making recommendations to the county leadership is drawing nearer.

Jackson County has two tourism agencies — one for the county as a whole and one for Cashiers — that oversee room tax money collected from overnight visitors by the lodging industry. Whether to merge the two entities has been a point of contention since last year.

The Cashiers agency did not want to dissolve its operation, which gets 75 percent of the room tax generated in the Cashiers area to spend on its own marketing. They argue that Cashiers needs its own tourism agency and revenue stream to cater to its own unique visitor demographic.

However, some leaders in Jackson County felt the duplication of two tourism promotional arms in the same county was superfluous.

The argument over whether to merge the two ultimately became a moot point, however. When the Jackson County Board of Commissioners tried to increase the lodging tax from 3 percent to 6 percent in January, they inadvertently triggered a state mandate that requires the two tourism entities to become one. The state in recent years has tightened up guidelines for how tourism agencies can operate since they oversee public tax dollars. Jackson County’s more unusual structure had been grandfathered in, but had to come into compliance when seeking a room tax increase.

Now the county has until January 2013 to set up the new tourism authority.

The task force is in the throes of finalizing its recommendations before sending them on to the Board of Commissioners for a final decision. But, as it reads now, no one on the committee is completely happy with it.

“This thing is so completely unacceptable to me that I feel like we’ve wasted four months” said Clifford Meads, general manager at the High Hampton Inn in Cashiers and a task force member. “It’s a mess.”

The version of the draft mulled over at the recent meeting of the tourism task force was partially new to the members and had been revised since the previous meeting to comply with various state statutes of which task force members said they had not been aware.

“This was done hastily,” said Commissioner Jack Debnam, who is also serving on the task force. “I would rather have the time to review this rather than sit here and try to guess what I’m reading.”

There are several key points that the task force must address: the make-up of the board; who will hire the Tourism Development Authority’s director; how much money will fund advertising versus capital projects and how it would be divvied up; and how much the room tax should be.

Issue: What should the new board look like? How many members? How many seats should be for lodging owners versus other attractions?

The recommendation calls for a 15-member tourism board. Lodging owners would get 10 of the 15 seats. Three board members will come from other tourism-related businesses. The remaining two seats would be reserved for one representative from the Cashiers Chamber of Commerce and one from Jackson County Chamber of Commerce.

Debnam said he does not want to have a board comprised fully of lodging owners because the authority’s actions affect all tourism-related businesses and the money should benefit of all of them.

“The thing that concerns me is that the (lodging) industry here in Jackson County acts like it’s their money, and it’s not. It’s a tax. It’s the people of Jackson County’s money,” Debnam said.

Swain County has nine members on its board, all of who are lodging owners. The reason is that the lodging owners are the ones who bring in the room tax revenue, said Karen Wilmot, executive director of the Swain Chamber of Commerce and member of the county TDA board. Wilmot said she did not feel the board make-up unfairly skewed how the money is spent.

“They all have a common goal,” Wilmot said.

Haywood County’s TDA only has six lodging owners who serve on its 15-member board. People visit counties for many reasons — to shop in store, eat in restaurants or see various other attractions — and those people need a prominent voice on the tourism board as well, said Lynn Collins, executive director of Haywood’s TDA.

Issue: How much representation should Cashiers get on the new tourism board compared to other areas of the county?

The proposed make-up currently guarantees Cashiers six seats o the board. calls for five lodging owners from south Jackson County, which is mostly Sylva and Cullowhee, and five from north Jackson County, or rather Cashiers and the surrounding areas. Cashiers would also get a Cashiers Chamber of Commerce representative and could also be eligible for seats reserved for tourism-related businesses.

Issue: Who would hire the TDA director and to whom he or she would be accountable?

This was the biggest sticking point at the task force’s most recent meeting. Under the current set-up, the directors of the Cashiers Chamber of Commerce and the Jackson Chamber of Commerce double as the tourism directors for their respective territories.

Having a single countywide tourism board also means having a single tourism director for the whole county. Who that person would report to and how they would be hired has proven controversial.

Meads wants the tourism board to have hiring and firing authority over the county tourism director.

According to the current draft proposal, a committee made up of three tourism board members, the county manager and the county human resources officer would vet candidates and hire an executive director. The director will be a county employee, subject to a yearly performance review by the committee.

Meads was worried that too much county input would stifle productivity because the director would be concerned about pleasing two bosses — the tourism board and county officials.

There are already people who work in and with the county who face such a conundrum, he said.

“It’s not intended to be that way, but it is what the end result is,” Meads said.

Commissioner Mark Jones agreed that such a setup could cause confusion about whom the person answers to. Jones recalled a former Economic Development Committee director who quit because she received conflicting directives from the county commissioner and the EDC board.

“The frustration was so great that she resigned,” Jones said.

Debnam argued that making the director a county employee would ensure that citizens get a say in how the tax money is spent and would not interfere with the effectiveness of the board.

Issue: How will tourism board members be selected: by the county commissioners or as a self-perpetuating board that appoints itself?

At least a couple of task force members think the board should operate mostly outside county control, beholden to the tourism industry and controlled by lodging owners.

“I believe that the authority should be autonomous, and I don’t subscribe to the notion that (the executive director) has to be a county employee,” Meads said. I do not agreed with this “force feed county control,” he said.

The tourism board is a public body, however, which oversees tax dollars and legally has to be appointed by commissioners. Meads wants to get around this by providing pre-selected tourism board members to the county commissioners and having the county simply rubberstamp the appointments.

Issue: Should room tax be put into one big pot, or split up among geographic areas of the county?

In initial discussions of the task force, Meads suggested that all the tax money generated in a specific area of the county remain there. Cashiers would keep all the tax revenue they brought in, as would the Sylva/Cullowhee area. The make-up would essentially mirror the county’s current tourism setup — with Cashiers acting as one separate entity and the rest of the county acting as another.

Divvying up the money that way would not allow for a common pot of money, which would help fund advertising or projects that benefit the whole county, said Julie Spiro, executive director of the Jackson County Chamber of Commerce, at a task force meeting in May. It would only lead to infighting among various tourism groups and tourism-related businesses, Spiro said.

The most recent draft of the ordinance simply states that the board will follow a county-approved plan for distributing the money. In other words, it seems undecided as of yet.

Issue: Should tourism money be spent on special projects and tourism-friendly amenities, or solely on marketing and promotions?

The state allows up to 30 percent of room tax revenue to be spent on “tourism-related” capital projects. It cold be anything from Christmas lights a town hangs up to way-finding signs. The only caveat is that the expense must be tourism-related. Other communities have used from tax money for stadium lights at festival grounds, fishing piers, soccer fields and greenway trail systems.

Jackson County room tax has historically be reserved purely for marketing and promotions, however, such as magazine advertisements and web marketing to reach broad audiences and entice them to come visit.

In the original proposal, Meads wanted to continue limiting room tax dollars for advertising and promotions, and none should be allocated to capital expenditures.

Debnam said he would like to see things like signage pointing the way to the Tuckasegee River or the Cashiers Recreation Center. He suggested setting aside some money each year.

But, Jones countered, where would the line would be drawn? Are picnic tables and trash cans tourism-related capital expenditures, he queried, according to the minutes of a June 23 meeting. Jones said he felt setting aside 30 percent or even 10 percent of its tax revenue would be too much, particularly if it will mostly be used to pay for signage.

The current draft opens the door for at least some capital expenditure allocations. However, the TDA board and the county commissioners would need to approve exactly what percentage could be set aside for capital projects.

Issue: How much to raise room taxes?

In January, the Jackson County commissioners voted to raise the room tax from 3 to 6 percent — or at least get permission from the state to hike the room tax rate. Whether to pull the trigger on enacting the increase was put on hold following outcry from the lodging industry, ultimately leading to the creation of the current task force to study the issue.

The board has delayed making any decision about the room tax until the task force presents its recommendations for the new TDA. The task force plans to recommend only a 1 percent increase, bringing Jackson County’s room tax rate to 4 percent.

“I think it’s a compromise with the tourism industry,” Debnam said.

Haywood and Swain counties both have 4 percent room tax rates. The town of Franklin in Macon County charges 6 percent.